Taking an Extra Moment to Consider Treatment Effects on Distributions

Gawain Heckley and Dennis Petrie

No 2024-18, Working Papers from Centre for Health Economics, Monash University

Abstract: This paper presents a flexible method, Parameter Estimation by Raw Moments (PERM), to evaluate a policy’s impact on parameters of the distribution of outcomes. Such parameters include the variance (E[Y2]−E[Y]2), skewness and covariance. While many studies estimate the mean (first moment), PERM extends this to estimate higher order moments, enabling calculation of distribution parameter treatment effects. Two implementations are discussed: regression with controls and DiD with staggered rollout. Applying PERM DiD to a Swedish school reform shows it reduced education inequality but increased earnings variance resulting in a lower covariance between education and earnings.

Keywords: Causal Inference; Policy Evaluation; Distribution Impacts; Income Inequality; Education Inequality (search for similar items in EconPapers)
JEL-codes: C10 I24 I26 I28 (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-ecm
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